A covert communication scheme has been described using phase modulation. The phase encoding scheme produces very complex dynamics that appear noise-like, with an approximately uniform PDF and impulsive ACF. Rayleigh amplitude modulation results in a signal similar to noise. BER estimates have been evaluated which indicate comparatively higher levels of Eb/No values for reliable communications. Statistical waveform analysis has been undertaken to provide indications of methods for improving receiver performance at low SNR and a state feedback (SF) architecture has also been proposed.